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Pence Working To Reassure Critics Of Business Personal Property Tax Exemption

Last updated on Friday, January 31, 2014

(INDIANAPOLIS) - With the legislature debating whether to allow local governments to exempt companies from the business personal property tax, Governor Pence wants to reassure critics that those governments won’t lose revenue if the tax goes away.

A coalition calling itself "Replace, Don't Erase" is pushing the General Assembly to guarantee a source of revenue that would make up for anything lost from the business tax.

"The proposed elimination of Indiana's business personal property tax is another pull from local funds without proper thought given to how our communities will continue to function and grow without these revenues," said Richard Hickman, mayor of Angola and president of the Indiana Association of Cities and Towns.

Pence says he has already asked lawmakers to ensure that new revenue will come from somewhere, though the source is not specified.

"My view of leadership is to say to the General Assembly is that I believe we ought to find a way to begin phasing out the business personal property tax," said Pence. "There's a broad range of options for ways (we can replace the revenue). We're looking at that full range, but making sure that this tax reform which is a win for our cities and a win for our economy is a priority for our administration."

The tax generates more than $800 million in revenue for local and county governments.

"Any further depletion of local revenues will have a real impact on the children and citizens we serve. We just cannot go down this slippery slope yet again without guaranteed replacement funds," says Denny Costerison, director of the Indiana Association of School Business Officials.

Pence believes it's more important to focus on getting rid of a tax that neighboring states either don't have (Illinois and Ohio) or are phasing out (Michigan).

"I remain convinced that Indiana would be more competitive in attracting the kind of investment that would create jobs if we could find a way to phase out" the tax, Pence said.

The House passed a version of the business personal property tax repeal on Thursday. The Senate is considering a different version of the bill.

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